Hoteliers question Council’s ‘tourist tax’ consultation results

Published on January 10, 2019 by TCI Team

CAPITAL hoteliers have branded claims that a majority of the city’s accommodation providers back a tourist tax “unbelievable”.

The city council released the results of a survey, part of its eight-week public consultation on its plans for a tax of two per cent or £2 per room per night, which showed 51 per cent of accommodation providers were in favour of the proposals. But Russell Imrie, spokesman for the Edinburgh Hotels Association, said: “It is unbelievable. We know, having spoken face-to-face with hoteliers, they are opposed to this.”

And he said the case against a tourist tax was simple. “The UK has the second highest rate of VAT in the EU on accommodation. We are at a distinct disadvantage already with the taxation we levy – to impose a further tax on our visitors is economic madness.”

The Scottish Tourism Alliance also questioned the survey findings. Chief executive Marc Crothall said: “Out of the 2560 responses to the consultation, just 17 per cent were from all businesses types, both within and outside Edinburgh which is very low considering the importance of the tourism economy, and only seven per cent were from Edinburgh accommodation providers.” He said the figures worked out at just 87 accommodation providers who had indicated strong support – less than five per cent of all tourism businesses in the city.

And UK Hospitality said it was “concerned” about the results. Executive director Willie Macleod said: “UKH is in no doubt that the vast majority of accommodation businesses in the city, including hotels, serviced apartments, B&Bs, hostels and self-catering properties, are opposed to a tourist tax.”

He said the council should make clear which types of accommodation businesses had responded. “This is an important point as, unlike the larger hotels and accommodation businesses, a significant number of smaller accommodation businesses in the city make no contribution to public finances through business rates, being exempt under the Small Business Bonus Scheme, or VAT, as they trade below the annual turnover threshold of £85,000, and have less to lose if consumers are saddled with a further and uncompetitive tax. Visitors are price-sensitive and it is naïve to assume that any additional tax will have no effect on visitor behaviour.”

UKH claims a tax of £2 per room per night would have a negative impact on the Capital’s economy of between £44m and £94m. Garry Clark, of the Federation of Small Businesses, said firms needed to know who would administer a new tax and what say they would have over how revenues were spent.

The council said the consultation had been a robust process and the survey was widely distributed to tourism organisations inviting them to circulate it among their members to complete.

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